Homeowners are asking if short sale deals are still a viable option for them when their home is underwater in today's market. We don't see as many on the market today as we did some years ago although they still happen because of the continually changing market. Many people argue that short sales are no longer worth all the hassle with the way the market is today. Let ‘s look at some of the details and determine if it is a good idea in 2018.
Short sales were widespread during the Meltdown and were the go-to method because they work so well. Investors were using this tool to help families when the value of their house was less than what their mortgage was worth. The consequence of seeing foreclosure on their record could devastate families for many years and even in some cases with an extension, up to 20 years. As a result, families were able to move on from a severe situation.
A short sale can take a very long time to process even if the family qualifies and everybody is on board. Despite all this, many investors jump on board picking up the property to either flip it or rent. in the past, the incentives were very high for the seller and the buyer making these types of deals very popular. The banks were even provided some incentive because the goal was to reduce non-performing loans on their books. So in essence, there was a potential for everybody to win.
In today's Marketplace, a lot of these incentives have changed. The banks are no longer getting as much help from the government and buyers are seeing higher prices come back from the bank or lender. This scenario is creating a bit of a challenge for the families that find themselves underwater today and maybe facing auction. Even the relocation fees have changed. It has made the landscape a bit more challenging to navigate.
It's becoming more difficult to find a motivated buyer to come in and help a family facing foreclosure even when they're willing to sell. Many perceive this is a bad thing, but the truth of the matter is the people still working with short sales are very skilled. The experienced investor can go a long way in helping families facing this situation. Having somebody to work with who understands the process inside and out can be worth their weight in gold.
These deals are still worth going after despite the improved Marketplace because there are areas, you can still Leverage. For example, the bank always needs to meet specific guidelines and cannot have an excessive amount of non-performing loans on their Ledger. If too many people default with a particular bank, that bank will have to explain themselves up the chain. This situation can affect how much money they're able to work in the future, so they want to be in good standing. Additionally, many lenders will glaze over there assessments with the broker price opinion sometimes resulting in unrealistic numbers. Furthermore, there is room to negotiate when you provide valid facts supporting why your inspection is different. You can also validate that inspection with photos.
To conclude, today's market for short sales involves a bit more research to execute but is productive and profitable. It is still a lucrative option in many situations when you're working with experienced people. Thinking out of the box is important because families are facing a dire situation that needs resolution.